XRP Lending Infrastructure Could Unlock New Borrowing Strategy, Analyst Says

XRP analyst James Dula says new lending infrastructure on the XRP Ledger could eventually let holders borrow against their XRP without selling it. 

He also believes they could earn yield on unused XRP to help offset borrowing costs.

In a post on X, Dula linked several recent developments. These include Coinbase’s XRP-backed loans, government-backed crypto mortgage structures, and proposed XRP Ledger lending features. He argued that together they could create a new financial model for long-term XRP holders.

Borrow Against XRP Without Selling

According to Dula, XRP holders can already use their tokens as collateral for crypto-backed loans through Coinbase, which added XRP as eligible collateral earlier this year.

He used a hypothetical example. An investor holding 10,000 XRP worth about $1 million, assuming an XRP price of $100, could pledge 2,500 XRP valued at around $250,000. With a loan-to-value ratio of roughly 49%, the investor could borrow about $120,000 in USDC without selling their XRP.

Dula said the transaction would be treated as a loan rather than a sale. That means it would not trigger a taxable capital gains event while allowing the investor to keep exposure to potential future XRP price gains.

Crypto-Backed Mortgages Show Where the Market Is Heading

Dula also pointed to a recent milestone involving Better Home & Finance and Coinbase. The companies completed the first Fannie Mae-backed mortgage in the United States using Bitcoin as collateral.

He said the structure combines a traditional mortgage with a separate crypto-backed loan for the down payment. Unlike many crypto-backed loans, the pledged Bitcoin is not automatically liquidated if its price falls, as long as the borrower continues making mortgage payments.

Although XRP is not supported under that program, Dula said it shows how crypto-backed financing could evolve. He believes similar structures could eventually be expanded to include XRP.

Proposed XRPL Lending Features Could Add Yield

Looking ahead, Dula said proposed XRP Ledger lending features, including XLS-66d, could further expand XRP’s utility.

In his scenario, XRP that is not used as collateral could be deposited into a Single Asset Vault. There, it would earn yield by supplying liquidity to institutional borrowers.

Assuming annual yields of 4% to 7%, Dula estimated that 7,500 XRP valued at $100 each could generate between $30,000 and $52,000 a year.

He compared that with a hypothetical borrowing cost of about 3.2% annually on the pledged XRP. That would result in interest expenses of roughly $3,800 per year.

According to Dula, the yield earned from the unpledged XRP could exceed the cost of servicing the loan. That could allow holders to borrow against their XRP, keep their long-term position, and cover financing costs through lending income.

Dula concluded that collateralized lending, institutional liquidity pools, and yield-generating vaults represent infrastructure that is gradually being built for digital assets. However, he acknowledged that some XRP-specific features, including XLS-66d, are still proposals and are not yet available.